February 16, 2016

Don't tell Washington, but corporations are quietly spending
billions on clean power. Renewable energy policy may be contentious on the
floors of the U.S. Congress and the Supreme Court, but it's finding more
friends than foes in corporate boardrooms. Last year was a record-breaker for corporate purchasing of large-scale wind
and solar energy, reports the Rocky Mountain Institute, which reports that
corporate use of renewable power in the U.S. more than doubled from 2014 to
2015--from 1.2 GW purchased in 2014 to nearly 3 GW of renewable energy
purchased in 2015.

President Obama's Clean Power Plan--which calls for slashing
power plant greenhouse gas emissions by 32 percent by 2030--has been
encountering heated resistance from some policymakers and fossil-fuel companies. And
yet, the move to cleaner power shows no signs of slowing, at least in the
corporate sector.

Green energy's latest endorsement: the corporate bottom line

Blue-chip corporations are increasingly pursuing clean power
sources, regardless of federal policy moves. While the trend began with
companies trading carbon credits, we are seeing a shift toward onsite renewable
energy generation and direct power-purchase agreements with clean energy
providers.

Many first pursued these options because they've made public
commitments to meet ambitious sustainability goals. Some have joined RE100, a collaborative, global
initiative of influential businesses committed to 100% renewable electricity, to
massively increase corporate demand for renewable energy.

Close to half (215) of Fortune 500 companies have set
ambitious clean energy and GHG reduction goals, according to Ceres
research, and some are aiming to achieve them by 2020. Among other blue-chip
companies, for example, Marriott has made a 2020 pledge to reduce energy
consumption by 20 percent, and Coca Cola plans to reduce carbon dioxide emissions by 25
percent.

These commitments drove the initial investments--but the ROI
from early efforts has created real economic momentum. As a result, corporate
social responsibility commitments are now being trumped by simple economics.

Even companies without defined sustainability goals are making moves toward
renewable power because of the financial viability of the clean energy supply
in the United States.

In addition, the use of renewable energy enables
organizations to budget better for energy costs and hedge against volatile
fossil fuel costs. Oil and gas prices may be very low today, but that wasn't
always the case--and they won't stay extraordinarily low because the market
always finds equilibrium eventually. The availability of renewable energy helps
mitigate the financial risk.

It's becoming easier and more cost-effective than ever for
corporations to access or invest in renewable energy. Here are five indicators
that corporate use of green energy is here to stay:

1. Wind turbines in the parking lot? No big deal. Onsite
power generation is becoming mainstream.

Using excess heat, wind or solar power, buildings that
generate their own power onsite can become more self-sustaining and achieve
more stable operating costs. Ultimately, some will even be able to sell excess
power back to the grid. Walgreens' first net-zero store, for instance, draws
on solar, wind and geothermal energy and was expected to consume an annual
200,000 kilowatt hours of electricity while generating 256,000 kWh.

Although that facility may not have yet achieved its
ambitious goal of being a net-zero energy facility, others have. In fact, New
Buildings.org maintains a significant database of net-zero buildings. Meanwhile,
thousands of corporate and institutional (and residential) facilities around
the United States are tapping renewable energy, whether generating it onsite or
connecting with nearby wind or solar farms.

One California company is working on the largest solar carport project in the world,covering carports with
solar panels in 150 sites across the state. In the category of brilliant but
simple, it turned property that had very little value into significant energy
savings, negotiating a 20-year power purchase agreement for 97.5 million
kWh/year. The electricity from these carports is enough to power 16.2K homes,
and also saves the business nearly $3 million annually in energy costs, or
roughly 15 percent of its typical utility bill.

With the rise of yieldcos (think wind or solar real estate investment trusts) and
extension of the solar power investment tax credits, we are seeing the cost of
money go down for clean energy projects, lowering the cost per kWh. Meanwhile, virtual
power plan agreements, like Yahoo's renewable energy contract with solar project
developers represent a new way forward for organizations seeking a
closer relationship with their clean energy suppliers.

According to Ceres' Power Forward 2.0 report, institutional investors have been
calling for companies to adopt greenhouse gas and other clean energy targets.
In the past two years, institutional investors have filed more than 100 clean
energy resolutions with companies in the electric power, oil and gas,
insurance, manufacturing, and other sectors. Shortly before the COP21
conference on climate change in December 2015, more than 400 investors with a
collective US$24 trillion in assets under management signed the Global Investor
Statement on Climate Change, a call to action setting out the steps investors
can and will take to address climate change.

Determining specific clean energy goals--and the path to achieving them--is a
complex undertaking for a company with dozens or hundreds of locations. Which
technologies will be most effective at which sites? The feasibility of wind,
solar, geothermal, biomass or renewable energy power depends upon local
environment conditions, as well as state or local incentives, require lengthy
investigations and cost analyses. Third-party alternative energy matchmakers are emerging to
help corporate property owners navigate everything from deal structuring and
vendor selection to post-implementation monitoring.

Outpacing fossil fuels

With all these trends in play, why be a 'dinosaur' when it comes to powering
corporate buildings and clean energy infrastructure is evolving so rapidly? The
world is currently adding more capacity for renewable energy each year than for
coal, natural gas and oil combined, reported Bloomberg New Energy Finance
analysts last year.

Clean power's attraction is becoming abundantly clear. By
benefiting corporate sustainability goals, resource efficiency, and the bottom
line, corporate demand for renewables is going strong. With or without the
Clean Power Plan, companies are taking greenhouse gas emissions reduction into
their own hands--and their pocketbooks.